COMPILING a business plan that will guarantee you finance is what many a business owner dreams of. But very few who place business plans before their banks are able to get a loan.

Rodney Prinsloo, CEO of Enterprise Support, a business support and mentoring organisation which assists business owners to get bank finance, says one of the biggest problems is that they don’t have any hand in writing their own business plans.

He says too many get a consultant to conceive and write up the plan, often with little or no input from the business owner.

When the bank questions the business owner about their business and how they intend to put the plan into practice, they often have little idea on how to roll it out.

A business owner should rather write the initial draft themselves and only take it to a consultant to be touched up, he says.

They can then get the consultant to type up the plan and deliver it to the bank on their behalf. This increases the chances of success because bankers like to read business plan’s drawn up by expert business consultants, says Prinsloo.

But even if you’ve enlisted the help of an expert consultant, a bank will be sceptical of a business owner who has little or no track record.

Prinsloo’s suggestion is to attach letters of intent from customers or contract agreements to your business plan as proof of the business’s expected income.

At the same time you should also list in your business plan who your accountant, your mentor and your management team are. The bank’s trust will increase in you if they see you’ve put the right team in place.

But you should always be honest when it comes to what you put down in your business plan. List any past judgments that your employees have had against themselves, rather than leave these out and risk the bank losing faith in you if they should find out later. This needn’t be contained in the executive summary, but can be placed in the body of the plan itself.

Other suggestions Prinsloo makes when it comes to compiling a business plan are:

• Include a two-page executive summary containing a brief description of the business’s track record, who the entrepreneur is, the management’s ability to run the business, the market viability of the business and what systems are in place to protect the investment.
• Attach a one-page matrix defining what amount you’re looking to loan from the bank, what you intend to use the loan for, what collateral or own contribution you have to put towards the loan itself.
• Specify how you plan to repay the loan, what market and sector you’re in, your management’s track record, and what systems you have in place.
• Keep the business plan addressed to the bank as concise as possible.
• Don’t use too many graphs in your business plan.

If you decide to get a business consultant to assist you in putting together a business plan to obtain finance, the consultant may ask a small percentage commission if your request for a loan from the bank is granted.

Prinsloo says this is usually a commission of one or two percent of the value of the loan.

Contact Enterprise Support on 011 795 1294.